Bonus claims

We are increasingly called upon to advise senior employees in high value claims and disputes concerning bonus payments. These claims are governed by contract law and require careful analysis of the terms of the bonus schemes.

Guaranteed bonuses
Discretionary bonuses
Negotiating bonus terms

Cases where a bonus is guaranteed can sometimes be managed by pursuing a debt recovery action, although where employment has been terminated this becomes more complex, with the drafting of the clause and the reason for termination often being an important issue.

However, it is much more likely that a bonus will be stated to be discretionary, where it is for the employer to determine whether and how much is payable. The courts have recognised that for many senior executives, particularly in financial and other competitive industries, bonus payments form an essential part of the pay structure. Consequently, it is possible to bring proceedings to recover a discretionary bonus by way of a breach of contract claim in some cases. We have successfully negotiated many settlements where we have pursued such discretionary payments as a contractual entitlement. In all cases, we will look into the precise circumstances, to consider whether there is any evidence of bad faith or discrimination in the employer's decision to pay a reduced bonus, or to withhold payment completely.

Our experience in this complex area informs our approach when negotiating new terms and conditions for senior employees. We are alert to the consequences of subtle nuances in drafting and our experts are skilled in agreeing terms which protect our clients' interests.

For more information on bonus claims or disputes. Please download a copy of our factsheet:

Bonus Discrimination Fact Sheet